U.S. Steel Corp. said it will delay construction of an electric arc furnace at its Fairfield Works operation in Alabama until market conditions improve, citing weak demand from the oil-and-gas sector and low steel prices.
The Pittsburgh company and other domestic steelmakers have been hurt by a glut of global steelmaking capacity and competition from less-expensive imports that has resulted in low prices.
In August U.S. Steel said it would shut its blast furnace and some steel finishing operations in Alabama, marking a significant retrenchment by the steelmaker.
The company had been building an electric arc furnace on the Fairfield Works site, which is near Birmingham, Ala. That furnace, which makes steel out of scrap metal instead of iron ore and coal, can operate with fewer workers and is much easier to stop and restart than a traditional blast furnace. The move aimed to improve the efficiency of its flat-rolled segment.
In its news release Monday, U.S. Steel said the postponed construction of the arc furnace wouldn’t affect its ability to serve customers. The company said it will continue to operate the Fairfield pipe mill, its steelmaking plants in Indiana, Michigan and Pennsylvania and some other operations.
Last month, U.S. Steel reported a narrower loss for the third quarter and cut its guidance for 2015 shipments and prices amid what it called excessive imports and noted that commercial markets weren’t improving as previously expected for the second half of the year.
Source: http://www.wsj.com/